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SELL
Longer-term outlook is "When will we hit peak traditional energy demand?". Big oil is not investing any more in North America. There is a window there where oil prices will stay high due to this lack of investment. Hard to time. Interesting for traders but long-term investors should sell into the strength.
oil
gas
BUY
Allan Tong’s Discover Picks Expedia, like the hotels and airlines it links to, has pricing power. Trading above $130, EXPE is still far below its highs of $217.72, which is precisely the price target going forward. The street is split between 12 holds and 12 buys. The PE of 106x is a concern, more in line for a tech company than a tourist attraction like Six Flags Entertainment, which trades at 16x. Read 3 stocks to profit from revenge travel for our full analysis.
merchandising
lodging
BUY
Allan Tong’s Discover Picks Mastercard stocks’ EPS of $9.61 has jumped 47% in the past year. It trades at 37.23x though the street’s forward PE is only 33.94x. (Visa’s PE is 40.4x). However, the ROE is 142% while Visa’s is barely 40%, and MA pays a safe dividend of nearly 2% at a payout ratio of 19.22%. All in all, the street is confident with MA with 15 buys and one sell, at a target of $431.19. Read 3 stocks to profit from revenge travel for our full analysis.
other services
BUY
Allan Tong’s Discover Picks Airbnb trades above 100x which the street finds too high, given its forward PE of 70.53x, so consider this a note of caution. However, the stock has beaten its last four quarters during periods of blanket lockdowns. Buying Airbnb is wagering on strong summer numbers and all indicators noted above point to one. Read 3 stocks to profit from revenge travel for our full analysis.
Technology
Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly WBA continues to show positive fundamentals and rising dividends and is again reiterated as a TOP PICK. Recently reported earnings beat expectations by 14% and support a 20% ROE. It trades at only 1.6x book value and 6x earnings, compared to peers at 14x. It has been paying dividends for 88 consecutive years and increasing them for 46 consecutive years, currently backed by a payout ratio under 30% of cash flow. Cash reserves continue to increase while retiring debt. We continue to recommend a stop loss at $40, looking to achieve $50 -- upside potential over 17%. Yield 4.4% (Analysts’ price target is $49.85)
specialty stores
Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly With agriculture taking centre stage during the Ukraine crisis, second only to energy, we again reiterate MOS as a TOP PICK. The company is the largest producer of potash and phosphate fertilizer in the US -- desperately needed to boost farmer yields during the global food shortage. It trades at 8x earnings compared to peers at 11x and and supports a healthy 23% ROE. It continues to build cash reserves will retiring debt. We recommend trailing down the stop slightly (from $55) to $52, looking to achieve $75 -- upside potential over 30%. Yield 1.01% (Analysts’ price target is $75.15)
chemicals
Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly With indicators suggesting that customers are rapidly returning to gaming centres, we select PLAY as a TOP PICK. Recently reported earnings showed sales were up 24% compared to pre-pandemic levels and margins expanded despite rising labour and operating costs. Operating leaner has resulted in ROE exceeding 46%. There is a fairly large short open interest with this stock, that may trigger short cover buying with a move over $40. We recommend setting a stop loss at $29, looking to achieve $56.50 -- upside potential over 48%. Yield 0% (Analysts’ price target is $56.44)
food services
